Reviewing Umpqua (UMPQ) and Flagstar Bancorp (FBC)

Umpqua (NASDAQ: UMPQ) and Flagstar Bancorp (NYSE:FBC) are both mid-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, risk, dividends, analyst recommendations, earnings and profitability.

Earnings & Valuation

This table compares Umpqua and Flagstar Bancorp’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Umpqua $1.22 billion 4.14 $246.01 million $1.07 21.39
Flagstar Bancorp $997.00 million 1.98 $63.00 million $2.47 13.91

Umpqua has higher revenue and earnings than Flagstar Bancorp. Flagstar Bancorp is trading at a lower price-to-earnings ratio than Umpqua, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Umpqua and Flagstar Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Umpqua 22.15% 6.68% 1.04%
Flagstar Bancorp 6.76% 10.62% 0.89%

Volatility and Risk

Umpqua has a beta of 1.01, suggesting that its stock price is 1% more volatile than the S&P 500. Comparatively, Flagstar Bancorp has a beta of 1.21, suggesting that its stock price is 21% more volatile than the S&P 500.

Dividends

Umpqua pays an annual dividend of $0.80 per share and has a dividend yield of 3.5%. Flagstar Bancorp does not pay a dividend. Umpqua pays out 74.8% of its earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Umpqua and Flagstar Bancorp, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Umpqua 1 6 4 0 2.27
Flagstar Bancorp 0 1 9 0 2.90

Umpqua currently has a consensus price target of $23.77, suggesting a potential upside of 3.86%. Flagstar Bancorp has a consensus price target of $40.17, suggesting a potential upside of 16.93%. Given Flagstar Bancorp’s stronger consensus rating and higher possible upside, analysts plainly believe Flagstar Bancorp is more favorable than Umpqua.

Insider & Institutional Ownership

90.7% of Umpqua shares are owned by institutional investors. Comparatively, 96.9% of Flagstar Bancorp shares are owned by institutional investors. 1.0% of Umpqua shares are owned by insiders. Comparatively, 62.9% of Flagstar Bancorp shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

Flagstar Bancorp beats Umpqua on 9 of the 16 factors compared between the two stocks.

About Umpqua

Umpqua Holdings Corporation, through its subsidiaries, provides commercial and retail banking, and retail brokerage services. It operates through four segments: Commercial Bank, Wealth Management, Retail Bank, and Home Lending. The company offers deposit products, including non-interest bearing checking, interest bearing checking and savings, and money market accounts, as well as certificates of deposit. It also provides loans for business and commercial customers, such as accounts receivable and inventory financing, multi-family and equipment loans, commercial equipment leases, international trade, real estate construction loans, permanent financing products, small business administration program financing, and residential mortgage loans, as well as capital markets and treasury management services. In addition, the company offers loan products for small businesses; commercial and industrial loans; residential real estate loans for the construction, purchase, and refinancing of residential owner-occupied and rental properties; and consumer loans comprising secured and unsecured personal loans, home equity and personal lines of credit, and motor vehicle loans. Further, it provides financial planning, trust, and investment services; broker dealer and investment advisory services; and technology-based services that include remote deposit capture, online banking, bill pay and treasury, mobile banking, voice response banking, automatic payroll deposit program, ATM, interactive product kiosks, and Website services. The company serves small businesses, middle market, and large commercial customers; individual investors; and high net worth individuals. As of December 31, 2017, it operated commercial banking centers in 333 locations in Oregon, Washington, California, Idaho, and Nevada. The company was founded in 1953 and is headquartered in Portland, Oregon.

About Flagstar Bancorp

Flagstar Bancorp, Inc. operates as a savings and loan holding company for Flagstar Bank, FSB that provides commercial, small business, and consumer banking services to individuals and businesses in the United States. Its Community Banking segment offers various products, such as checking accounts, savings accounts, money market accounts, certificates of deposit, consumer and commercial loans, commercial real estate loans, equipment finance and leasing, home builder finance loans, and warehouse lines of credit. It also provides other financial services, including consumer and corporate card services, customized treasury management solutions, merchant services, and capital markets services, such as loan syndications, as well as wealth management products and services. This segment serves consumer, business, and mortgage lending customers through its branch banking, business and commercial banking, government banking, warehouse lending, and loans held-for-investment (LHFI) portfolio groups. The company's Mortgage Originations segment originates, acquires, and sells one-to-four family residential mortgage loans through home loan and national call centers, Internet and unaffiliated banks, mortgage banking, and brokerage companies. Its Mortgage Servicing segment offers services and subservices mortgage loans; and the servicing of residential mortgages for its LHFI portfolio, as well as noninterest-bearing escrow services. As of January 23, 2018, the company provided banking services through 99 branches in Michigan; and home loans through a wholesale network of brokers and correspondents in 50 states, as well as 89 retail locations in 29 states. Flagstar Bancorp, Inc. was founded in 1987 and is headquartered in Troy, Michigan.

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